100% bonus depreciation can allow an immediate deduction for the eligible basis of qualifying assets. For a short-term rental, the opportunity concerns eligible components and equipment—not an automatic write-off of the full condo purchase.

What do the current rules say?

The IRS issued Notice 2026-11 describing the restored 100% additional first-year deduction for qualifying property acquired after January 19, 2025. Eligibility and the acquisition and placed-in-service rules still matter. Your adviser should evaluate the actual transaction rather than applying a rate solely because closing happens in a particular year. IRS announcement and Notice 2026-11 ↗

Which parts of a rental may matter?

Furniture, equipment, and other correctly classified qualifying assets can have different depreciation treatment from the building itself. A cost segregation study may support the classification of relevant components. Land is not depreciable. IRS cost segregation guide ↗

Does a $100,000 deduction mean $100,000 saved?

No. A deduction reduces taxable income to the extent it is allowed and usable; it is not a dollar-for-dollar tax credit. As a simple illustration, a fully usable $100,000 deduction at an assumed 30% marginal rate would correspond to $30,000 of tax reduction before other interactions. That illustration is not a projection for a Jesse residence or any buyer.

Can an STR loss offset my salary?

That result is not automatic. Under the passive-activity rules, average customer use of seven days or less is one exception to the definition of a rental activity. Material participation and other limitations still affect the owner’s result. Hiring a manager, buying a short-term rental, or ordering a study alone does not establish a nonpassive loss. Discuss your operating role and records with your CPA. IRS passive-activity and at-risk rules ↗

Plan beyond the first year

Ask your adviser to model ownership and an eventual sale together. Depreciation can affect adjusted basis and tax treatment when property is sold; the first-year deduction should not be viewed in isolation. IRS depreciation and recapture information ↗

Before purchasing, bring your expected closing date, furnishing budget, operating plan, personal-use plans, and financing to the tax discussion. Then compare the projected tax treatment with the property’s operating cash flow. Each answers a different investment question.